SGR May Be Fixed for Good

The pesky Sustainable Growth Rate (SGR) that annually threatens to cut provider’s Medicare pay by double-digit numbers, then is “fixed” by Congress at the last minute, may be fixed for good if bipartisan leaders of two Congressional committees have their way.

Originally a deficit-reduction tool adopted in 1997 , the SGR has turned into an annual angel of fiscal death for providers as the calculation often dictated a more than 25 percent average cut during a fiscal year – and more or less depending on the specialty or service. Providers worried about the consequences, but have always been rescued from the implementation of the SGR. For 2014 the proposed SGR is 25 percent.

Several news outlets report a discussion draft was released Oct. 30 by the Senate Finance and House Ways and Means committees that would replace the SGR with a new system encouraging physicians to move to alternative payment models emphasizing quality care. The proposed model would hold pay at current levels as alternative models are developed and tested. According to Kaiser Health News, it would combine some existing Medicare physician quality programs into a new initiative starting in 2017 that would offer doctors additional pay based on their performance on value-based criteria, such as making more same-day appointments for urgent needs and enhancing their use of electronic medical records. Providers who receive a significant portion of their annual revenue from an alternative payment model would receive a 5 percent bonus through 2021.

Alternative models could include the newly launched accountable care organizations (ACOs), in which providers and facilities coordinate to reduce cost of care while improving quality of care, or a patient-centered medical home, where a primary care provider oversees the patient’s medical needs, including the use of specialists. The proposal would also create a process to ensure accurate payment for provider services, reward care coordination for patients with multiple chronic conditions and introduce physician-developed care guidelines to reduce “inappropriate care that harms patients,” according to a summary.

Finance Committee Chairman Max Baucus, D-Mont., wants the bill to be discussed and tied up by the end of the year. Already evident cooperation between parties and chambers indicates the death angel of SGR’s days may be numbered.

Brad Ericson, MPC, CPC, COSC, has been publisher for more than nine years. Before AAPC he was at Optum for 13 years and at Aetna Health Plans before that. He has been writing and publishing about healthcare since 1979. He received his Bachelor's in Journalism from Idaho State University and his Master's of Professional Communication degree from Westminster College of Salt Lake City.

Brad Ericson, MPC, CPC, COSC, has been publisher for more than nine years. Before AAPC he was at Optum for 13 years and at Aetna Health Plans before that. He has been writing and publishing about healthcare since 1979. He received his Bachelor's in Journalism from Idaho State University and his Master's of Professional Communication degree from Westminster College of Salt Lake City.